The idea of the economic team follows the model of the United Kingdom, which defined this same percentage and reached the mark of almost 90% of accredited companies acting legally. The Ministry of Finance has already closed the initial text and sent the draft to the PGFN, which analyzes the constitutionality and makes contributions on the merits.
Among the CBF's demands is the allocation of a larger share of the net revenue obtained from betting. The government is open to negotiating with the confederation and clubs. The draft of the Provisional Measure (PM), however, proposes the continuity of the allocation of 1.63% for entities that transfer brands to bookmakers. The confederation claims 4%.
The clubs, on the other hand, have two main demands: the change in the transfer of profits from betting –they want to remove the concentration from the CBF, which centralizes and distributes– and the flexibility in the payment of the license that the PM will stipulate for the continuity of the operation of the betting companies in Brazil.
The clubs will ask, for example, for the installment of the license to the companies so that they continue to sponsor the teams. Poder360 found that there is consensus in the government regarding the value of the license of R$ 30 million (US$ 5.9m) with validity of 5 years. The details of how the payment will be made for sports betting companies to operate in Brazil, however, can be left for after the PM, by means of an ordinance.
According to betting market estimates, the amount of R$ 30 million (US$ 5.9m) can be paid in cash by a maximum of 13 companies that operate in the field and sponsor teams from the A, B and C series of Brazilian football. Regarding the other 10 companies that sponsor 13 teams, there are doubts as to whether they will be able to afford this bill.
RETURN OF THE RASPADINHA (SCRATCH CARD)
Poder30 also found that the text of the PM should not be restricted only to the taxation of online sports companies, but, in a broader scope, return with a lottery modality extinct in the government of Michel Temer. With the return of the lottery, the government expects to collect R$ 5 billion (US$ 987m) a year. This amount is included in the collection estimate of at least R$ 12 billion (US$ 2.4b) by the PM, announced by the Minister of Finance, Fernando Haddad (PT).
Lotex was operated by Caixa Econômica Federal, which had a monopoly on lotteries in the country, but was auctioned in October 2019. The Estrela Instantânea consortium, formed by IGT and SGI, took the business at the time, but announced in 2020 that it would withdraw of the concession process because of requests that were not answered by the federal government.
Another reason for the company to abandon the business was a decision by the STF (Federal Supreme Court). The Court defined that the exploitation of lotteries was not exclusive to the Union, allowing the States and the Federal District to manage the activity. The result could open competition for the consortium, which wanted to explore, with exclusivity, the instant lottery.
Caixa's internal studies showed the Lula government that the “raspadinha” (scratch card) was the second highest grossing lottery in the world. As it was discontinued, it ended up affecting Union revenue. Lotex's return is part of the Executive's fiscal effort to increase revenue.
In summary, regarding the PM for betting, Poder360 found that:
*The Ministry of Finance has already closed the text and sent the draft to the Attorney General of the National Treasury, which analyzes the constitutionality and makes contributions
*The next step is to collect opinions from representative entities and other ministries next week (from 10 to 16 April)
*The main football clubs in Rio de Janeiro and São Paulo will be heard on April 11th, and the CBF on April 13th regarding the text of the proposal
*The government, via the PGFN, is studying whether to charge the R$ 30 million (US$ 5.9m) license in one lump sum or in installments
*The details of how the license will be for sports betting companies to operate in Brazil may come after the PM, by means of an ordinance
*The expectation is to reach a final text (post-suggestions) of the PM within two weeks, but that depends on the Planalto Palace
*The PM will propose the return of scratch cards (Lotex), with an expected profit of R$ 5 billion (US$ 987m) annually
*The government closed a model that stipulates the taxation of 15% of the GGR (Gross Gaming Revenue), that is, of the gross collection minus the prize paid to gamblers
*The draft of the PM proposes the continuity of the allocation of 1.63% of the net revenue obtained by betting lotteries to entities that transfer brands to bookmakers
*CBF claims 4%
*One of the clubs' requests is to change the way in which profits from betting are transferred — they want to remove the concentration from the CBF, which centralizes and distributes
*The government is open to negotiating with the CBF and football clubs
Source: Poder360
